Flameout at the Tax Force

Thursday in the neighborhood we are going to open again the doors of Tacoma's tax reform panel, the City Services Tax Task Force, which yesterday looked into alternatives to the city manager's city services tax and didn't like what they saw. Voting 7-2 against the only alternative that would raise as much revenue, the task force has apparently decided on the original plan, or maybe no plan.

Your obedient correspondent authored a scheme which would have created no new taxes, while at the same time generating the needed revenue and allowing small businesses a $600,000 standard deduction on the B&O, not to mention giving ice cream to every child on the 4th of July. What's not to like. Taxes were nudged up, down and sideways. Up a bit on the largest firms, down for a penny on retail of food and drugs, and sideways to the so-called nonprofit hospitals. Zero effect on the property tax. It was kind of a sculpture in spam, considering the funky medium of taxes available to the city. But I don't mind telling you I was a bit miffed when it went down in flames.

Partly because it spoiled my sculpture and partly because it left the city manager's (he does have a name, Eric Anderson, a wonderful, dedicated, thick-skinned fellow) original plan as the only alternative to fill the gap on the table.

Apparently the devil is in the details, because the task force found a lot of devil in mine, and there is at this point very little detail on the city manager's plan. We can guess, though, that after it gets through our task force there will be no reference to nonprofits. And we know the property tax is the only funding source identified for police, fire and library. This means a 300-400 percent hike in the city's part of the property tax, at least $1,200 more per year on a $200,000 house and a minimum bump of $50 in my monthly rent.

I will guess that, even though we offer them up to one cent on the sales tax and the mysterious B&O tax goes away, voters will not embrace the mporting of the burden into the property tax.

Some time ago I suspended blogging here from respect for the deliberations of the group. Though the readership may be slightly smaller than the Western World, it seemed to cause some concern. I return to it today in search of revenue. I'm not convinced we've understood the need for new revenue after the Eyman initiatives. The revenue architecture is just not sturdy enough for the load ahead. Anderson bought two years with a workforce reduction and reorganization that cut close to, but did not hit the bone. Beyond the second year, it's not pretty.

Mind you, if the property-based scheme gets to the ballot, I'll vote for it. No question. The city's ability to fulfill its mission, the primary services of police, fire, library, streets and roads is in doubt without new revenue. And maybe I'm being premature. I admit that constricting the tax base by a wholesale shift to property taxes is something natural sensibilities, or maybe my economics training, allows me to witness only with a physical queasiness.

Yes, the TF has other revenue plans on the table, but none that come close to filling the gap. One is to take advantage of the legal window now open to raise the property tax to the 106% limit. Another is a form of occupancy tax. There are three related to roads funding. Then there is the grand plan for the B&O borrowed from the Gates Commission of 2002. After all, every city in Washington is up against the same problem.

But as a practical matter ...